The motor finance redress scheme: what brokers need to know (October 2026)
The FCA’s redress scheme for motor finance commission is the biggest regulatory event the industry has seen in years, and parts of it are now on hold. Where things stand, and what brokers should be doing.
Last checked: 25 October 2026. This is a fast-moving area. Check the FCA’s motor finance pages for the latest position before acting. This article is a summary, not legal advice.
The short version
In March 2026 the FCA confirmed an industry-wide redress scheme for customers who weren’t told about certain commission arrangements on motor finance taken out between 6 April 2007 and 1 November 2024. Lenders are responsible for working out and paying redress. In July 2026, after legal challenges, the Upper Tribunal suspended parts of the scheme. A full hearing is listed for February 2027. Some obligations still apply now.
What the scheme covers
The FCA’s final rules (policy statement PS26/3) set up two schemes, one for agreements from 6 April 2007 to 31 March 2014 and one for 1 April 2014 to 1 November 2024. Customers are in scope where the lender paid commission to the broker and the customer wasn’t told about at least one of these arrangements:
- Discretionary commission arrangements (DCAs): where the broker could adjust the interest rate and so earn more commission.
- High commission: commission of at least 39% of the total cost of credit and 10% of the loan.
- Contractual ties: arrangements giving a lender exclusivity or a right of first refusal, subject to an exception where there were visible links between the manufacturer and the dealer.
There are exclusions, including small commission amounts (£120 or less before 1 April 2014, £150 or less from that date), 0% APR agreements, and customers who already have a final outcome on their complaint.
The FCA estimated around 12.1 million eligible agreements, an average payment of about £829 per agreement, and total redress of around £7.5bn if 75% of eligible customers take part.
Where it stands now
Several lenders and a consumer group challenged the scheme. On 2 July 2026 the Upper Tribunal suspended parts of it on terms agreed with the challengers. On 13 October 2026 the FCA confirmed the challenges will be heard from 16 to 26 February 2027, with judgment expected in the months after.
For now, lenders don’t need to calculate or pay compensation under the scheme. They do still need to identify relevant complaints and agreements and gather commission and disclosure information, among other rules that remain in force. The FCA has also told lenders to prepare for the possibility that the scheme is quashed, in which case complaints would go back to the usual complaints process.
Customers who aren’t contacted under the scheme can still complain to the firm until 31 August 2027.
What it means for brokers
The scheme puts the duty to calculate and pay redress on lenders. But much of the information lenders need to apply it often sits with brokers and dealers:
- What commission was paid on each agreement, and how it was calculated.
- Whether the broker could influence the rate, and whether they did.
- What the customer was told about commission, and when, and whether they acknowledged it.
- The relationship between the broker, the dealer and the lender.
Expect lenders to ask for this, and expect customers (and claims firms acting for them) to ask you about historic deals as well. Your contracts with lenders may also say who bears what.
What brokers should be doing now
- Find your historic records. Agreements, commission statements and disclosure documents going back as far as you have them. Know where they are and how quickly you can retrieve a single deal.
- Handle commission complaints properly. Log them, acknowledge them and follow the current FCA rules for motor finance complaints (which differ from the normal DISP process while the scheme is in place). See our DISP guide for the standard rules.
- Talk to your lenders. Understand what they’ll ask you for, in what format and by when.
- Get today’s deals right. Whatever happens to the scheme, clear commission disclosure, signed and stored on every deal, is the best protection for the deals you’re writing now.
- Take advice. If you have material historic exposure, speak to a compliance consultant or solicitor.
How DealStack helps with today’s deals
DealStack can’t fix records from 2015, but it can make sure the deals you write today are easy to evidence. Commission disclosure is signed on the deal, commission is tracked on every deal, every change is recorded field by field, and complaints are logged and run against the right timelines with letters and root causes. If a lender or customer asks how a deal was handled, the answer is on the deal.
Book a demo to see it in practice.